EADS chief waives 7-figure bonus for another year

* Gallois gives up more than 1 million euros in 2009 bonus

* EADS announces move in addendum to 2009 results

* Company gives no reason for decision

* Frenchman’s earnings dwarfed by those of Boeing CEO

By Tim Hepherand Matthias Blamont

PARIS, May 3 (BestGrowthStock) – EADS (EAD.PA: ) Chief Executive Louis
Gallois has given up an annual bonus of more than 1 million
euros ($1.3 million) for a second year running, the Airbus
parent said, leaving him significantly worse off than his top
American rival.

The Frenchman is paid a fixed salary of 900,000 euros for
running the world’s second largest aerospace company after
Boeing (BA.N: ) and was slated to receive an additional variable
pay award of 1.14 million euros for 2009.

EADS said in a notice on its website that Gallois had told
the board of his decision to waive the bonus on March 8, when
the company was about to announce a 763 million euro net 2009
loss caused by huge cost overruns on the Airbus A400M military
plane. [ID:nLDE62805F]

EADS subsequently went ahead and announced the bonus in its
full 2009 statements, but EADS said in an addendum published on
Monday that Gallois had since formally waived the award.

EADS did not give a reason for the decision but Gallois had
already waived a larger bonus of 1.55 million euros the previous
year after EADS posted a 2008 profit of 1.57 billion euros.

Gallois had asked the company to give the 2008 bonus to
charity as a signal to staff at a time when the company was
tightening its belt due to the recession. He is expected to
return to the issue at a shareholder meeting on June 1.

Gallois’s basic salary was unchanged from 2008.

His earnings are dwarfed by those of his counterpart at
Boeing, James McNerney, who earned $19.4 million including
salary, bonuses, stock options and pension changes in 2009,
according to a March proxy filing. [ID:nN15215212]

McNerney’s cash bonus based on annual financial targets rose
58.5 percent to $2.3 million.


The voluntary move also means Gallois, 66, a former civil
servant and Socialist ministerial adviser who led state such as
the SNCF railway, is paid less than some EADS group executives
including the head of Airbus unit Tom Enders.

His personal austerity has been welcomed by unions but has
not been universally popular with EADS managers.

“Not everybody on the executive committee is dancing with
joy about this,” a company source told Reuters recently.

With the company losing money but rich in available cash,
the composition of the formula used to calculate executive
bonuses has also been a sensitive internal matter this year.

The variable portion of top EADS salaries is derived half
from a cocktail of operating earnings, cash and capital employed
and half from bonus objectives given to each individual.

Gallois replaced Noel Forgeard as co-chief executive of EADS
in 2006, initially sharing the role with Enders, to try to
dampen a massive row over delays to the Airbus A380 superjumbo.

One of his first tasks was to implement unpopular
restructuring plans and he soon faced a political and media
storm over an 8 million euro pay-off to predecessor Forgeard.

Gallois has taken a high-profile stand against excess stock
options, which are a politically sensitive subject in France,
and in 2007 he suggested sharing EADS dividends with workers.

The decision to give up a new bonus emerged on the eve of
salary talks between Airbus and French unions set for Tuesday.

Gallois’ mellow but straight-talking managerial style is
partly credited with taming powerful unions at the planemaker’s
main French factories, nicknamed the “Republic of Toulouse” by
bosses, but there have been recent wildcat strikes over pay.

Stock Market Money

(Additional reporting by Kyle Peterson; Editing by David
($1=.7508 Euro)

EADS chief waives 7-figure bonus for another year